Kenya is exploring a plan to repurchase up to $500 million worth of its Eurobonds during the 2026/27 fiscal year, Bloomberg reports. The government would simultaneously issue new dollar-denominated bonds to fund the buyback operation.
The strategy aims to ease debt repayment pressure, minimise refinancing risks, and capitalise on growing investor interest in African sovereign debt. Any leftover funds from the new bond issuance would go towards general budget financing.
If the transaction goes ahead, it'll be Kenya's fourth external debt buyback within two years, according to Mwango Capital, a Nairobi-based financial services firm. The pattern shows how aggressively the government is now managing its external debt obligations.
The final buyback amount depends on investor demand for the new bonds. Officials haven't yet made a final decision on the proposal, and plans could still shift based on discussions among government officials.
Similar moves are rippling across Africa. Angola announced Eurobond repurchase plans in May targeting bonds maturing in 2028 and 2029, while the Republic of Congo previously bought back debt it issued in November at historically high borrowing costs.
President William Ruto's administration is trying to stabilise public finances after two turbulent years. The country allocates more money to debt servicing than to health and education combined, according to budget documents.
The International Monetary Fund has flagged Kenya as facing high risk of debt distress. Ruto withdrew tax measures worth approximately $2.7 billion in 2024 after nationwide protests forced his hand, restricting revenue growth just as debt obligations climbed.
The government has already pursued several debt management manoeuvres to cut costs and smooth payments. Last year, Kenya restructured part of its China debt by converting a portion of its Standard Gauge Railway loan into yuan, reducing exchange-rate expenses and easing strain on dollar reserves.
Kenya's external public debt hit $43.7 billion as of late March, Treasury figures show. The World Bank holds the largest share at $15.3 billion, followed by $10.6 billion owed to Eurobond investors and $4.69 billion to China.
The government's intensified focus on debt portfolio management reflects improving global financing conditions and Kenya's determination to regain fiscal stability.
